Bribe and Prejudice: The crime for the bribe that was never paid

Introduction

Against the landscape of increasing enforcement activity against bribery and corruption, a typical fact pattern that often emerges is one where a person bribes the employee of a customer in order to gain an advantage and get more business from that customer. The giver of that bribe will have, under the laws of most regimes, committed a crime of corruption. If the giver was acting on behalf of his principal, the principal may also incur legal liability for the acts of its agent, the giver.

But what if the giver fails to give the bribe at all? What if he chooses to pocket the payment instead of giving it to the employee of that customer? He may have arguably defrauded his principal but could he have committed the crime of corruption?

In a recent Singapore case concerning bribes that were intended to be paid by the accused to an employee of a French luxury goods company as inducement for furthering the business relationship of the accused’s employer, the judge was confronted with the scenario where the bribe was actually never paid but lined the pocket of the accused instead (LV case).

In a twist of legal reasoning that achieved an outcome of a conviction for corruption, notwithstanding that the bribes were not actually given, the accused was found guilty of being a corrupt recipient of the payments instead, and sentenced to 9 months’ jail and a penalty of S$49,500.

Facts

Koh Puay Boon (Accused) was the managing director of a company called Artmazement Global Pte Ltd (Artmazement) that provided renovation contracting services specializing in fitting out luxury boutiques. The Accused was in charge of developing clients, securing projects and managing the production. One of its main clients was Louis Vuitton (LV). The Accused’s fellow director Evan Lim (Lim) was in charge of the financial, human resource and administrative matters for the company, including the preparation of payment and salary vouchers.

From July 2012 to March 2013, 5 cheques totaling S$49,500 jointly signed by Lim and the Accused were made out to and received by the Accused. Lim’s evidence, which was accepted by the court, was that the payments were meant to be commissions to an LV employee so that Artmazement could secure continued business with LV. The Accused did not dispute receiving the payments but denied giving them to anyone else, much less as bribes to an LV employee. As a result, it was argued, Artmazement could not have gained any business advantage from such payments.

The Accused left Artmazement in April 2013 and the company ceased operations at the end of 2013.

Decision

The Accused was charged under section 5(a)(i) of the Prevention of Corruption Act (Cap 241) (PCA) which provides that:

“Any person who shall by himself or by or in conjunction with any other person (a) corruptly solicit or receive, or agree to receive for himself, or for any other person… any gratification as an inducement to or reward for, or otherwise on account of (i) any person doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed… shall be guilty of an offence and shall be liable on conviction to a fine not exceeding S$100,000 or to imprisonment for a term not exceeding 5 years or to both.”

The court decided that the prosecution need only prove that the Accused received the monies on the basis that it was for an LV employee as an inducement for that employee to further Artmazement’s business relationship with LV. The judge added: “The fact that [the bribes] were not paid is not fatal to the prosecution’s case”.

Taking a different perspective to the classical bribery fact pattern, the judge held that: “paying an employee of your client in order to secure more business is obviously corrupt and so is the receiving of monies to do the same”. In other words, the Accused was not convicted of giving a bribe, but of receiving monies corruptly from Lim so as to potentially pay them out as bribes.

The court also ruled that the Accused’s credibility was successfully impeached by the prosecution due to his multiple inconsistencies in testimony – which further undermined and prejudiced his argument that the payments were actually commissions meant for himself.

In imposing the 9 months’ jail sentence on the Accused, the judge warned “I must reiterate that there is no presumption that only a non-custodial sentence will be imposed for cases of private sector corruption”, and affirmed the position taken by Chief Justice Menon in PP v Syed Mostofa Romel [2015] 3 SLR 1166 (see our article on Bribery and corruption in the shipping industry) where it was made unequivocally clear that the perception that public sector corruption typically attract a custodial sentence while private sector corruption typically attract fines was wrong, and not reflective of the law in Singapore.

Analysis

The Singapore court showed in the LV case that it was prepared to overcome the evidential hurdle that the bribe was never paid. It nevertheless found the Accused guilty of corruption by holding him culpable for corruptly receiving the payments. On the facts, the Accused had received S$49,500 from cheques signed by Lim and himself. It would not be difficult to conceive of scenarios where the accused was using his own monies for the intended bribe but did not actually carry out the payment. In such cases, the accused would not have received anything and may not be liable for corrupt receipt.

The Singapore court was also prepared to find the Accused guilty of corruption even in circumstances where Artmazement could not have gained any business advantage from LV since the bribes were not actually paid to the LV employee. This approach draws a parallel with section 9 of the PCA where a person who has corruptly received or given a bribe would be guilty even if the recipient did not have the power, right or opportunity to carry out the act that he was bribed for.

The Accused was the managing director of Artmazement and, it would appear, had a strong hand in running the business. He could arguably be considered the directing mind and will of the company. His conduct could potentially have been attributed to the company and, if so, corporate criminal liability could have been imposed on Artmazement (see our article on Corporate criminal liability for bribery offences). The point was, however, moot because the company ceased operations by the end of 2013. While the Singapore Attorney-General’s Chambers has historically focused on individual criminal liability for bribery offences, there is now a rebalancing of prosecutorial discretion to consider the appropriateness of prosecuting corporate entities as well.

While Singapore stays vigilant against public sector bribery, the Corrupt Practices Investigation Bureau – the country’s graft-buster – has articulated on more than a few occasions that private sector bribery actually outstrips the public sector in terms of cases reported and investigated. The stance of the Singapore courts reflects a similar resolve not to treat private sector bribery with any less seriousness. The prevailing sentencing consideration remains that of general deterrence. In the appropriate private sector bribery case, custodial sentences will still be meted out.



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